Distinguish between the following two methods of depreciation: straight-line and diminishing balance method.

The straight-line method for depreciation calculates a fixed amount of depreciation over the assets useful life. The reducing balance method calculates the depreciation every year based on the assets net book value. The depreciation amount therefore reduces each year. 

RB

Related Accounting GCSE answers

All answers ▸

What is the purpose of depreciating assets?


List three ways in which the accounting equation can be written.


What is the difference between capital expenditure and revenue expenditure?


Who may be interested in viewing a company's balance sheet/ financial statement?